Spending was down month-to-month in seven of the 16 nonresidential subcategories. Private nonresidential spending was down 0.8%, while public nonresidential construction spending was up 0.6% in October.
“While economists have spent much of 2022 watching interest rates march higher and fretting about recession, contractors have been working through their lofty backlog and improving America’s built environment,” said ABC Chief Economist Anirban Basu. “Despite the rising cost of capital, elevated materials prices and equipment shortages, contractors have generally remained upbeat despite a worsening outlook, according to ABC’s Construction Confidence Index.
“These data suggest that nonresidential construction activity is weakening,” said Basu. “Spending declined in a majority of nonresidential subsectors in October, and residential spending has now fallen in each of the previous four months. The only bright spot: the 0.6% increase in publicly financed nonresidential construction spending. The infrastructure package and excess pandemic relief funds should allow the public sector to retain momentum even as the broader economy weakens.”